Canadian traveltech company Plusgrade announced on Tuesday that it is buying Israeli startup UpStay, a developer of a fully automated tech platform for hotel upgrades, and will open an R&D center in the country.
As part of the acquisition deal valued at several tens of millions of dollars, Upstay, which employs 20 people, most of them at its local R&D center, will move to new offices and hire 30 additional staff. The new office will become Plusgrade’s Israeli R&D center.
Founded in 2019 by CEO Tzafrir Blonder together with Omry Litvak and Dor Krubiner, UpStay’s system uses AI algorithms that send data-driven and personalized special offers to hotel guests to intice them to make room upgrades or additional add-on purchases prior to their arrival and throughout their stay.
To date, the Tel Aviv-based startup has raised $3.5 million. Among its first investors are Journey Ventures, a travel tech investment venture, jointly led by Israeli hotel chain Fattal Hotels Ltd. and Tel Aviv-based deep tech investment firm Spring Ventures Ltd.
“This is an exciting day for UpStay,” said Blonder. “After 4 years of incredible growth and success, we are thrilled to be joining forces with Plusgrade to invest further in our product offerings and enhance our ability to drive ancillary revenue for our partners through the upselling of additional hotel rooms and services.”
Founded in 2009 with headquarters in Montreal and offices in New York and Singapore, Plusgrade says its platform generates “billions of dollars” of new revenue channels for 200 customers, including global airlines, cruise lines, and passenger rail operators. For example, the platform provides airline passengers with a bidding system for seat upgrades during online check-ins for flights. It also offers services such as the blocking of an adjacent seating area on the plane for travelers interested in flying comfortably.
With the acquisition of UpStay, the Canadian traveltech firm says it will expand its upgrade platform to the hotel industry for the first time.
“We are thrilled to have the UpStay team join us, and look forward to tapping into their expertise and innovative technology,” said Plusgrade CEO Ken Harris. “The acquisition of UpStay is another step forward for our vision and mission of becoming the global ancillary revenue powerhouse.”
UpStay’s system enables hotels to offer a personalized upgrade to their guests for an additional fee. The platform connects to the hotel’s system and is sending guests who have made a reservation an email with offers to upgrade their room whether it is the size, view, floor, or other improvements at an additional cost. Each guest can place a bid on what they believe is a fair rate for a room or service upgrade, UpStay says its system ensures that hotel inventories are always sold at the highest possible price point.
UpStay’s system is used by hundreds of hotels in 17 countries including the Fattal hotel chain, 200 Leonardo hotels in Europe, the Intercontinental hotel chain, as well as hotel chains in Mexico and the United States.